5 per cent increase in Murcia property values last year, say Tinsa

Increases in all of Spain’s 17 regions as values climb more sharply than at any point in the last 11 years

Leading Spanish property valuation firm Tinsa have published their summary of market trends for the final quarter of 2018, reporting the sharpest rise in average values across the country since late 2007 as the figure rose by 5.8 per cent to 1,337 euros per square metre.

This means that since the market bottomed out in early 2015, Tinsa have observed an increase in the value of Spanish housing of 11.7 per cent, although the figure is still 34.7 per cent lower than the peak which was reached in late 2007, and perhaps the most important aspect of the latest data is that values are reported to have risen during 2018 in all 17 of the country’s regions. There is still great disparity among the rates of increase, however, ranging from 10.8 per cent in Madrid to just 0.4 per cent in Extremadura, while the Region of Murcia saw a rise of 5 per cent, close to the national average (as was the case in other Mediterranean coastal regions).

The figures for Spain’s 50 provinces show even more diversity, with the table topped by a 10.9 per cent rise in Lleida (in the north of Catalunya) but decreases observed in 9 provinces, the sharpest of them in Soria (-5.2 per cent).

Soria also foots the list in terms of the provincial capitals of Spain, with a drop of 10.8 per cent, while the city of Murcia is among those where Tinsa report the sharpest rises: a 13.9 per cent increase in Tinsa’s average property valuation in Murcia is close to the highest figures in the country, those of Valencia (16.8 per cent), Málaga (15.4 per cent) and Tarragona (15.1 per cent).

A word of warning should accompany these data: there is a suspicion among certain property market analysts that valuation firms may be succumbing to the temptation to over-value residential property in Spain, as was the case in the years of speculative buying during the boom prior to 2008. This possibility is fuelled by the willingness of banks to offer mortgages for all or almost all of the purchase price of homes, a practice for which a high official valuation is required.

This is the kind of practice that enabled the market bubble to grow so large just over a decade ago, with disastrous consequences, but on the other hand there are indications, again according to Tinsa, that there is unlikely to be a repeat of that phenomenon. In Madrid, Barcelona and the Balearics, where the recovery began earlier than in the rest of Spain, there are signs that the increase in the market value of housing slowed down in the second half of the year, while in other parts of the country momentum is now growing as they “catch up” with the islands and Spain’s two largest cities.